Normally, dividend-paying stocks hand out their disbursements once every quarter. For those who just can't wait that long, there exists a handful of issuers that pay their shareholders every month.
Although it's based in Canada, oil and gas company Vermilion Energy concentrates much of its effort on assets abroad. It has stakes in oil and gas plays south of the border in the U.S., plus nations such as the Netherlands, Ireland, France, Germany, and Australia.
The company is an eager and opportunistic acquirer of assets. This approach has helped it grow its production figure consistently for over a decade -- even through 2014, when crude oil saw a scary price drop from which it still hasn't fully recovered.
That being said, as a gas and oil producer, Vermilion sees its fortunes rise and fall along with the price of crude. This situation is fairly standard in the industry, but potential investors still need to be aware of this occasionally see-sawing tendency. In addition, Vermilion's business at times requires heavy investment to make its assets productive.
With the recent uptick in the oil price, the company saw its sales rise in Q3 -- its top line expanded by 7% on a year-over-year basis to CA$249 million ($195 million). Because of substantially higher capital expenditures, however, the bottom-line loss widened to CA$39 million ($31 million). But for the most part, the company has been profitable.
Vermilion's bottom line may swing wildly at times, but the company is resolute about its dividend. It's handed out the same monthly payout of nearly CA$0.22 ($0.17) per share since the beginning of 2014. At the most recent closing stock price, that yields 5.4%.
Main Street Capital
Business development company (BDC) Main Street Capital has been a standout among its peers lately, and not only for its once-per-month dividend. So far this year, Main Street's stock has risen by almost 13%, well outpacing the performance of Ares Capital, Apollo Investment, and fellow monthly dividend dispenser Prospect Capital.
What sets Main Street apart from its peers somewhat is its tendency to take out equity investments in the companies it assists; most BDCs tend to opt for debt financing.
In either case, it isn't easy to succeed in the BDC game. Such companies make their coin by financing relatively small, privately held companies, the performances of which can be volatile.
Main Street has a lengthening string of bottom-line beats behind it, thanks to some real gems in the nearly 200-strong portfolio of companies it's invested in. That portfolio is spread far and wide, as far as geography and sector are concerned. No single industry occupies more than 7% of its asset lineup, and Main Street's investments are more dispersed more or less evenly across the United States.
In its most recently reported quarter, Main Street managed to raise its net investment income, a key fundamental item for BDCs, by 11% on a year-over-year basis to just over $34 million. That shook out to $0.60 per share, which is sufficient to cover the company's monthly $0.19-per-share dividend. (BDCs are required to distribute at least 90% of their taxable income as shareholder dividends).
Main Street most recently raised its dividend in August, with a slight 3% lift to that $0.19 per share. That amount yields 5.5% at the latest closing stock price.
Don't forget the basics
It's very appealing to get paid 12 times a year from our stocks, but frequency should never be the only criterion when evaluating an income stock. Potential investors should, as always, do their basic research: Consider the stock's underlying fundamentals, compare it with its peers, and so on. Not all dividend payers are created equal